Help - Monies given before death for an annex that wasn’t built

Cluffy01

Keep_pedalling said:

Is this family member also a beneficiary of the will? 

Yes. He is both an executor and beneficiary, as I am. 

Cluffy01

Marcon said:

Cluffy01 said:

Hi everyone, I’d be grateful for your assistance. 

A reasonably large sum of money was given from my father to a family member to build an annex for my father to live in as he was getting older. 
Unfortunately my father died before plans were finalised or planning permission was even applied for. 

In a “letter of wishes” my father stated that if he hadn’t moved into the annex at the time of his death then the money should be returned to his estate. 

The family member is saying that the letter of wishes is not a legal document and that my father still wanted him to build the annex (although the annex is no longer required) and so they are not returning the money. 

Where do I stand legally? What would you do?

Nobody here is going to be able to answer conclusively on the basis of a couple of lines of background, or have any impact on how the 'family member' behaves.

If you want to know where you stand legally, then getting legal advice would be your answer. That's what I would do.

Thank you. I will do. 

Marcon

Cluffy01 said:

Marcon said:

Cluffy01 said:

Hi everyone, I’d be grateful for your assistance. 

A reasonably large sum of money was given from my father to a family member to build an annex for my father to live in as he was getting older. 
Unfortunately my father died before plans were finalised or planning permission was even applied for. 

In a “letter of wishes” my father stated that if he hadn’t moved into the annex at the time of his death then the money should be returned to his estate. 

The family member is saying that the letter of wishes is not a legal document and that my father still wanted him to build the annex (although the annex is no longer required) and so they are not returning the money. 

Where do I stand legally? What would you do?

Nobody here is going to be able to answer conclusively on the basis of a couple of lines of background, or have any impact on how the 'family member' behaves.

If you want to know where you stand legally, then getting legal advice would be your answer. That's what I would do.

Thank you. I will do. 

I hope things work out without too much friction in the family.

Savvy_Sue

How many beneficiaries, and are any of them under 18? (They would not be able to agree to receiving a reduced inheritance.)

What does the other executor (the one in the same position as you) think? Two against one ... 

Cluffy01

Savvy_Sue said:

How many beneficiaries, and are any of them under 18? (They would not be able to agree to receiving a reduced inheritance.)

What does the other executor (the one and the same position as you) think? Two against one ... 

All over 18 and my sister agrees with me that the funds should be returned to the estate.  Sadly I don’t think the two against one position will work as the other person does not have the word compromise in their vocabulary! 

Cluffy01

My father has signed a very basic loan agreement stating that he will loan my brother £500k from the sale of his property to allow my brother to build a house (without my brother having to sell his house to fund it - my father also lived with my brother at the time). 

It said in the agreement that once my brother had built the house he would sell his current house and repay the loan. 

There was no other specific written timescales. 

It also said that my father wanted this to go ahead even after his death and that all beneficiaries agree to this loan. 

My sister and I (the other beneficiaries) did not agree and were not there when my father and brother had a solicitor witness the agreement. (The solicitor didn’t draw up the agreement it was one printed from the internet)

My father recently died and his house is now part of his estate. 

My question is do we have to honour this loan agreement after my father’s death?

I sadly now do not get on with my brother and do not trust him to repay the loan. 

What if he can’t repay it if costs of building the new house spiral or he loses his job etc etc.
I know I won’t be his priority. 

I also don’t think the loan agreement is fair with no actual timescales and it states all parties were aware of this agreement when they weren’t. (we didn’t sign where it said that)

I will ultimately seek legal advice but was hoping for some opinions. 

Thanks 😊 

Flugelhorn

Cluffy01 said:

Flugelhorn said:

It doesn't sound like it was a GIFT to this person (it was handed over so a specific task could be done for your father's benefit) or at least if it was then it was a gift with strings attached (reservations) ie that it was for the purpose of building your father's annexe. 

if it was a gift given in the last 7 years it would be considered part of the estate for IHT anway.

It definitely wasn’t a gift. I can’t believe that he wants to keep the funds under the guise that he said my father wanted him to still build it. Even though I have it in writing that it was to go back to the estate. Frustrating. 

Thanks for your reply. 

If not a gift then surely still part of the estate? Needs deducting from his share of the estate.

Has he still got the money?? or has it been spent elsewhere? - 

Keep_pedalling

Who has your father appointed as executors? Has this new house been built? If it is built and has your brother sold his other property? Is IHT likely to be an issue? 

bobster2

So the question is - can an agreement signed before someone's death compel the executors of an estate to loan money from the estate to someone - i.e. establish a creditor/debtor relationship.

In terms of practicalities - who are the executors? who are the beneficiaries of the will? What is the total value of his estate?

Emmia

Does this relate to your other thread?

https://forums.moneysavingexpert.com/discussion/6605081/help-monies-given-before-death-for-an-annex-that-wasn-t-built#Comment_81434550

It's really best to keep things in a single thread to get the best "advice" for the situation.